Obamacare Plans

The Affordable Care Act has defined the type of health insurance that carriers can now offer.  These new plans will be available on January 1 2014 and are often referenced as “metal plans”.  The four metal plans available are:

• Platinum
• Gold
• Silver
• Bronze

The actuarial value (AV), a term that hasn’t been used much to the general public in the past, is what distinguishes the differences between the plans.  Actuarial value is a measure of how much the consumers medical expenses are paid by the health insurance company and how much is paid by the consumer.  For example if the plan is said to have 70% actuarial value then this means that the plan is expected to pay 70% of the average consumers medical expenses and the other 30% will be the responsibility of the consumer.

As you can expect, the higher the AV the higher the premium and vice versa.  However carriers do not have to offer all four plans.  By law they must offer both the Silver and Gold level plans.  As is the case today we expect plan prices to vary between carriers as well as between each plan level since there is a lot of freedom to adjust the plans deductible, coinsurance, etc just as long as they stay within the actuarial value of the plan.

In addition to these four plans carriers can also offer a catastrophic plan which does not meet the Bronze requirement.  Only certain individuals can qualify for this plan and it is not eligible for the government subsidy.